The Stock Exchange group Nasdaq announced that it is initiating artificial intelligence (AI) technology to automate the anti-money laundering (AML) investigation by banks.
The company expects that the new AI system would help the banks and other financial organizations to make it cheap and quicker to solve the number alert cases created by bank transaction monitoring systems.
Nasdaq says that the alerts come up to about 300,000 a month and the process of manually investigating it involves tremendous money and effort. Usually, banks place a wide net to catch the illicit activities so that most of these cases end up being false.
The AML technology head, Darren Innes says that banks are worried about the huge cost involved in setting this net and Nasdaq aims to reduce this cost. Mr Innes also added that during the COVID-19, banks have seen a considerable increase in illicit activities.
The stock exchange group has been present for a long period in the market technology sector including the trade surveillance system and with the launch of this new technology, Nasdaq is stepping into the AML sector.
This new move comes in line with banks and financial institutions trying to automate expensive back-office processes to increase efficiency and reduce cost.
“We have been thinking long and hard on how we want to go beyond trade surveillance. It’s a product launch but strategically it’s a launch beyond trade surveillance. We have great ambitions in the space.”
The new AI system was built in collaboration with UK-based startup Caspian. The AI system will fetch information needed to conduct an AML investigation and examine the data with software that recreates a human decision.